1. INTEGRATION OF EU ENERGY MARKETS Jorge Vasconcelos Council of European Energy Regulators GTE Autumn Conference 2003 Paris, October 22, 2003

3. VERTICALLY INTEGRATED MONOPOLIES VERTICALLY INTEGRATED MONOPOLIES MARKET REGULATION COMMAND AND CONTROL RATE OF RETURN REGULATION NETWORKS WHOLESALE / RETAIL MARKETS INCENTIVE BASED REGULATION

4. VERTICALLY INTEGRATED NATIONAL MONOPOLY NETWORKS EUROPEAN INTEGRATION “EUROPEANIZATION” LIBERALIZATION COMPETITORS REGULATION EUROPEAN MARKET

5. 1988 89 90 91 92 93 94 95 96 97 98 99 00 01 02 2003 LEGISLATION REGULATION WHITE PAPER TRANSIT PRICE TRANSPARENCY REGULATION CROSS-BORDER 2nd GAS DIR. 2nd EL. DIR. 1st ELECTRICITY DIRECTIVE 1st GAS DIRECTIVE

6. LACK OF TRANSMISSION CAPACITY IN PARTICULAR, CROSS-BORDER INTERCONNECTION CAPACITY 1. THE MISSING STEPS:

7. LACK OF TRANSPARENCY IN NETWORK ACCESS CONDITIONS INCLUDING NETWORK ACCESS TARIFFS AND CONGESTION MANAGEMENT 2. THE MISSING STEPS:

8. LACK OF TRANSPARENCY IN THE TECHNICAL OPERATION OF INTERCONNECTED SYSTEMS 3. THE MISSING STEPS:

9. LACK OF ROBUST, DEEP AND LIQUID ORGANISED ENERGY MARKETS IN MOST GEOGRAPHICAL AREAS 4. THE MISSING STEPS:

10. LACK OF TRANSPARENCY AND PREDICTABILITY CONCERNING RULES APPLIED TO THE APPROVAL OR REFUSAL OF MERGERS AND ACQUISITIONS IN THE ENERGY FIELD THE MISSING STEPS: 5.